Civil Aviation Regulations' Effect On The Efficiency Of Air Transport Industry In China

After the reform and opening policy, Chinese government has adopted many regulations to keep the civil aviation developing steadily and effectively. Up to now. regulatory reform has undergone several steps, including regulation, deregulation, and re-regulation after disorder. Many innovative measures have been carried out. but the consequence is not as satisfactory as we expected, for the reform has brought loss to the whole aviation industry or welfare loss to customers and the society as a whole. Meanwhile, efficiency of air transport industry has been affected to some extent.Under the circumstance, we bring about questions as follows, whether the efficiency of air transport industry is high or not, and how did the industrial regulations influence it? Based on the research on different regulations after reform and opening policy, this thesis aims to learn from overseas study on aviation reform and to research influences of regulation on air transport industry, so as to search for effective suggestions for government regulations.Based on theories of regulatory economics and western efficiency economics, this thesis uses DEA-Malmquist index to study changes of efficiency of China's airline industry during 1995 and 2007 and factors (technique improvement and technique efficiency) which affect the general efficiency. By setting different dummy variables according to aviation regulation, we establish a metric-economics model, and in this way, we estimate the effect of aviation regulation on air transport industry.From the measurement by DEAP2.1, we can find that from 1995 to 2007, pure technique efficiency of China's air transport industry kept relatively steady, while the scale efficiency showed increasing trend on rather low level. The scale efficiencies were inefficient besides 2004 and 2007, therefore, the low scale efficiency was the main reason leading to rather low technology efficiency. During many years, relatively low scale efficiency occurred because economies of scale has not been exploited, under which circumstance there were much more capital investment like routes and labor inputs like registered members than actually needed. In other words, these inputs didn't produce the due quantity of product and service, so the efficiency of this industry didn't increase accordingly and the products like volume of passenger transportation and civil aviation business revenue were inadequate. Under the circumstance of producing constant products, we should minimize volume of inputs, especially the investment of routes and registered labors.By Eviews3.1, we estimated the efficiency of air transport industry in China during 1995-2007, and then, we did regression between it and the variable aviation regulation in our country. From the final analysis, we can draw the conclusion that aviation regulation plays positive impact on the increase of air transport industrial efficiency. The enhancement of air transport industrial efficiency shows positive correlation with reform in the degree of regulation to industrial units, reform in the extent of regulation content and with the construction of laws and regulations.